The total value of premiums written by Europes insurers reached 1.114 trillion last year despite the difficult economic environment, figures published by Insurance Europe today have revealed.
According to provisional data in the industry body's Annual report 2012-2013, both life and non-life premiums increased last year. The total for gross written premiums was 3.3% higher than the 1.079trn recorded in 2011.
The report noted that the European economic situation has a direct impact on insurers. Official figures show that the European Union's gross domestic product fell by 0.3% last year, largely due to a worsening in the eurozone crisis in the first half of the year.
Insurance Europe noted, however, that European capital markets recovered in the second half of the year after EU leaders decided in June to create a single supervisory mechanism as a first step towards a banking union. They also benefited from the European Central Bank's August announcement of plans to purchase in secondary sovereign bond markets, which removed doubts about the future of the euro.
Insurance Europe's director general, Michaela Koller, said: 'Even though the European insurance industry is currently operating in a difficult economic environment, with low interest rates affecting investment returns, particularly for life insurers, and austerity affecting consumers' purchasing choices, the 2012 performance remains solid.'
The group's data indicates that life premiums, which account for almost 60% of all premiums written, grew by just under 1% last year from 639bn to an estimated 656bn. This follows a drop of 6% the previous year.
The four largest markets continue to be the UK, France, Germany and Italy, which together account for around 70% of all life premiums written in Europe. UK growth drove the overall improvement, as premiums there grew by 10%. Insurance Europe largely attributed this to a rise in new single premium business, and in particular in individual pensions.
After Germany's total premiums fell by 3.9% in 2011, last year saw 0.6% growth. The report said this moderate growth was a result of 'regular business' increasing.
However, both France and Italy saw life premiums fall for the second consecutive year. The decline - by 8% and 5% respectively was, however, an improvement from the 13% and 18% fall in the value of premiums written in 2011.
'In France, the key driver for the downward trend is still competition from other financial products. In Italy, the negative growth primarily reflects a decrease in traditional life insurance policies,' the report explained.
Insurance Europe's preliminary estimates for the non-life market show that total premiums written totalled 459bn last year, an increase of almost 3% on the 441bn recorded in 2011. All three of the largest non-life lines - in motor, health and property - reported an increase in business, with the strongest growth seen in property.
Motor insurance remains the largest business line in the non-life sector, accounting for 30% of the market. However, last year saw a slowdown in the growth of premiums, with the 2% increase coming after a 6% rise in premium values in 2011.
Health insurance, which represents 25% of the non-life market, also saw its premium growth continue to slow. According to the report's provisional estimates, 2012 saw a rise in premiums of 2.5%, to 116bn, significantly less than the 5.8% and 3.2% growth recorded in 2010 and 2011 respectively.